April 20 (Bloomberg) -- Amgen Inc., the world’s largest
biotechnology company, said first-quarter profit fell 3.6
percent as sales of the company’s anemia drugs declined and
marketing expenses increased because of a new bone treatment.

Net income dropped to $1.13 billion, or $1.20 a share, from
$1.17 billion, or $1.18, a year earlier, the Thousand Oaks,
California-based company said today in a statement. Earnings
excluding one-time items beat by 5 cents the $1.29 average
estimate of 22 analysts surveyed by Bloomberg.

Combined sales of the company’s anemia medications Aranesp
and Epogen, used by patients with kidney disease, fell 11
percent on declining use due to tighter rules on reimbursement
from Medicare. Revenue from denosumab, approved last year as
Prolia to treat women with osteoporosis and Xgeva to reduce
fractures in cancer patients, topped analyst estimates.

“Epogen is definitely feeling the effects of bundling”
from Medicare, said Eric Schmidt, a Cowen & Co. analyst in New
York.

Amgen fell $1.18, or 2.1 percent, to $55 at 5:19 p.m. New
York time in extended Nasdaq Stock Market composite trading. The
shares have declined 6.6 percent in the past 12 months.

The company reaffirmed its forecast of earnings per share
of $5 to $5.20 for 2011, issued on Jan. 24. First-quarter EPS
rose because stock repurchases reduced the number of shares
outstanding, Schmidt said.

Marketing Expenses

Revenue rose 3 percent to $3.7 billion, helped by denosumab
sales of $69 million. Selling and administrative expenses jumped
16 percent to $1.02 billion as the company stepped up marketing
for denosumab. Research and development costs rose 14 percent to
$736 million.

“This is unusual for Amgen which has been and remains
disciplined” at managing expenses, Amgen Chief Executive
Officer Kevin Sharer said today during a conference call with
analysts. “2011 is an investment year for Amgen as we launch
two products and move three promising programs into” late-stage
studies.

Xgeva sales may top $1 billion next year, said Michael Yee,
a San Francisco-based analyst with RBC Capital Markets. The
company may unveil plans at an investor meeting tomorrow to
start paying a dividend, a move that would boost the flagging
stock price, Yee said in a telephone interview yesterday.

“The announcement of a dividend with a yield around 2
percent will get value and income investors interested in the
stock,” Yee said. The stock may rally more if the company
pleases growth investors by announcing “an aggressive move to
cut research and development spending,” Yee said. Research
spending topped $2.9 billion last year.